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Balance Sheet Components
6 Months Ended
Dec. 31, 2016
Balance Sheet Components  
Balance Sheet Components

2. Balance Sheet Components

 

Financing receivables

 

A financing receivable is a contractual right to receive money, on demand or on fixed or determinable dates, that is recognized as an asset in the Company’s balance sheet. The Company’s financing receivables, consisting of its accounts receivable with contractual maturities of more than one year and capital leases, totaled $6.0 million and $7.6 million at December 31, 2016 and June 30, 2016, respectively, and are included in Other Assets in the condensed consolidated balance sheets. Of the $6.0 million in financing receivables at December 31, 2016, $3.2 million is related to sales-type leases with customers while the remaining $2.8 million is related to contractual maturities of more than one year. Of the $7.6 million in financing receivables at June 30, 2016, $3.5 million is related to sales-type leases with customers while the remaining $4.1 million is related to contractual maturities of more than one year. Due to the homogenous nature of the leasing transactions, the Company manages them on an aggregate basis when assessing and monitoring credit risk. The Company evaluates the credit quality of an obligor at lease inception and monitors credit quality over the term of the underlying transactions. The Company performs a credit analysis for all new customers and reviews payment history, current order backlog, financial performance of the customers and other variables that augment or mitigate the inherent credit risk of a particular transaction. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits. Accounts rated as low risk typically have the equivalent of a Moody’s rating of Baa3 or higher, while accounts rated as moderate risk generally have the equivalent of a Ba1 or lower. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of non-payments. As of December 31, 2016, the sales-type lease portion of the financing receivables was rated at a moderate risk. The Company performed an assessment of the allowance for credit losses related to its financing receivables as of December 31, 2016 and June 30, 2016. Based upon such assessment, the Company did not record an allowance for credit losses related to such financing receivables as of December 31, 2016 and June 30, 2016, respectively.

 

A summary of the Company’s financing receivables is presented as follows (in thousands):

 

 

 

 

 

Financed

 

 

 

 

 

Lease

 

Service Contracts

 

 

 

December 31, 2016

 

Receivables

 

and Other

 

Total

 

Gross

 

$

4,417

 

$

4,931

 

$

9,348

 

Residual value

 

 

 

 

Unearned income

 

(515

)

 

(515

)

Allowance for credit loss

 

 

 

 

 

 

 

 

 

 

 

 

Total, net

 

$

3,902

 

$

4,931

 

$

8,833

 

 

 

 

 

 

 

 

 

 

 

 

Reported as:

 

 

 

 

 

 

 

Current

 

$

743

 

$

2,092

 

$

2,835

 

Non-current

 

3,159

 

2,839

 

5,998

 

 

 

 

 

 

 

 

 

Total, net

 

$

3,902

 

$

4,931

 

$

8,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financed

 

 

 

 

 

Lease

 

Service Contracts

 

 

 

June 30, 2016

 

Receivables

 

and Other

 

Total

 

Gross

 

$

4,998

 

$

5,840

 

$

10,838

 

Residual value

 

 

 

 

Unearned income

 

(623

)

 

(623

)

Allowance for credit loss

 

 

 

 

 

 

 

 

 

 

 

 

Total, net

 

$

4,375

 

$

5,840

 

$

10,215

 

 

 

 

 

 

 

 

 

 

 

 

Reported as:

 

 

 

 

 

 

 

Current

 

$

840

 

$

1,778

 

$

2,618

 

Non-current

 

3,535

 

4,062

 

7,597

 

 

 

 

 

 

 

 

 

Total, net

 

$

4,375

 

$

5,840

 

$

10,215

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual cash collections may differ from the contracted maturities due to early customer buyouts, refinancing, or defaults. Future minimum lease payments to be received as of December 31, 2016 are presented as follows (in thousands):

 

Year Ending June 30,

 

 

 

Amount

 

2017 (remaining six months)

 

 

 

$

387 

 

2018

 

 

 

930 

 

2019

 

 

 

930 

 

2020

 

 

 

930 

 

2021

 

 

 

930 

 

2022

 

 

 

310 

 

 

 

 

 

 

 

Total

 

 

 

$

4,417 

 

 

 

 

 

 

 

 

 

Inventories

 

Inventories consisted of the following (in thousands):

 

 

 

December 31,

 

June 30,

 

 

 

2016

 

2016

 

Raw materials

 

$

46,074 

 

$

50,480 

 

Work-in-process

 

19,567 

 

20,190 

 

Finished goods

 

51,261 

 

45,317 

 

 

 

 

 

 

 

Inventories

 

$

116,902 

 

$

115,987 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

Property and equipment, net consisted of the following (in thousands):

 

 

 

December 31,

 

June 30,

 

 

 

2016

 

2016

 

Furniture and fixtures

 

$

4,505

 

$

4,527

 

Computer and office equipment

 

11,696

 

11,485

 

Software

 

11,352

 

11,104

 

Leasehold improvements

 

22,631

 

21,632

 

Machinery and equipment

 

49,316

 

47,171

 

Construction in progress

 

2,413

 

4,412

 

 

 

 

 

 

 

 

 

101,913

 

100,331

 

Less: Accumulated depreciation

 

(76,946

)

(72,453

)

 

 

 

 

 

 

Property and equipment, net

 

$

24,967

 

$

27,878

 

 

 

 

 

 

 

 

 

 

Depreciation expense related to property and equipment for the three and six months ended December 31, 2016 was $2.6 million and $5.3 million, respectively. Depreciation expense related to property and equipment for the three and six months ended December 31, 2015 was $2.5 million and $5.1 million, respectively.